Landlord Recordkeeping: What to Keep, for How Long, and Why
How long a landlord should keep tax records, purchase and improvement records, 1099s, leases and screening files, with the federal rules behind each.
By Seayora Editorial Team · Published · Facts checked · 3 min read
Short answer: Keep a rental’s tax records for at least three years after you file the return they support, and longer in some cases. Keep the records of what you paid for the property and its improvements until three years after the year you sell it. Leases, deposit records and screening files run on their own clocks, set by your state’s law and federal fair housing and consumer-report rules.
How long does the IRS expect you to keep records?
The general rule is three years from the date you filed the return, because that is how long the IRS usually has to assess more tax. It is six years if you left out income of more than 25% of the gross income shown on the return, and seven years for a claim for a loss from worthless securities or a bad debt deduction. If you never filed, or filed a fraudulent return, there is no limit (IRS: How long should I keep records?).
| Record | Keep it at least | Why |
|---|---|---|
| Rent receipts, invoices, receipts and bank statements | 3 years after filing (6 or 7 in the cases above) | They support the income and expenses on Schedule E |
| Closing statement, purchase price and improvement invoices | Until 3 years after the return for the year you sell | They set your basis, depreciation and gain |
| Depreciation schedules (Form 4562) | Until 3 years after the return for the year you sell | Depreciation reduces basis and is recaptured on sale |
| Forms 1099 you filed and the W-9s behind them | At least 3 years; 4 if you withheld backup withholding | Information return rules |
| Payroll records, if you employ anyone | At least 4 years | Employment tax rules |
| Rental applications and screening decisions | At least 2 years, longer where state law allows a later claim | A fair housing suit can be brought within two years |
Why keep purchase records so long?
Records of what you paid for a property, and for each improvement, prove your basis. Basis decides your depreciation each year and your gain when you sell, so those records matter until the period of limitations ends for the year of the sale. IRS Publication 583 describes the records a business should keep.
What about applications and screening files?
An applicant can sue under the federal Fair Housing Act within two years of the alleged discrimination (42 U.S.C. § 3613), and some state laws allow longer, so keep your written screening criteria and each decision for at least that long. When you do discard a consumer report, the FTC’s Disposal Rule requires you to destroy it securely, by shredding paper or erasing electronic files.
What about leases and deposit records?
Keep the lease, the move-in and move-out inspections, and the deposit statement for the whole tenancy and then for as long as a claim over the deposit or the lease could still be brought in your state. Many landlords keep them for several years after the tenant leaves. Your state’s deposit rules are summarized, with the statute linked, in our security deposit return deadlines by state.
How do you keep records that hold up?
- Keep one set of books per property, so every record ties to the property it supports.
- Attach the receipt to the expense it supports, instead of a separate folder of paper.
- Keep signed leases with their signing record, so you can show who signed and when.
- Back up, or export, once a year and keep the export with that year’s return.
In Seayora a photographed receipt is attached to its expense (receipt capture), leases keep their signing record, inspection reports are frozen once completed, and your data can be exported at any time.
Frequently asked questions
Can I keep digital copies instead of paper?
Yes. The IRS accepts electronic records that are accurate, legible and complete, as long as you can produce them if asked.
How long should I keep a rejected applicant’s file?
At least two years, the federal Fair Housing Act limit for a private suit, and longer if your state allows a later claim. Destroy any consumer report securely when you discard it.
Sources
- How long should I keep records?, IRS
- Publication 583, Starting a Business and Keeping Records, IRS
- Publication 527, Residential Rental Property, IRS
- 42 U.S.C. § 3613, Enforcement by private persons (Fair Housing Act), Legal Information Institute
- 16 CFR Part 682, Disposal of Consumer Report Information and Records, Legal Information Institute
How Seayora helps
Receipt capture: Photograph a receipt and it is attached to the expense it supports.
This article is general information, not tax advice. Tax rules change and your situation is your own, so confirm the treatment with a CPA or enrolled agent before you file.
How we write and check these guides: editorial standards.
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